North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S279 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	S 1
4		-	SENATE BILL 279
	3	+	S D
	4	+	SENATE BILL DRS15102-NIa-50
	5	+
5	6
6	7
7	8		Short Title: Baby Bond Trust Fund. (Public)
8	9		Sponsors: Senators Murdock, Meyer, and Salvador (Primary Sponsors).
9		-	Referred to: ~~Rules and Operations of the Senate~~
10		-	~~March 13, 2025~~
11		-	~~S279 -v-1~~
	10	+	Referred to:
	11	+
	12	+	DRS15102 -NIa-50
12	13		A BILL TO BE ENTITLED 1
13	14		AN ACT TO ESTABLISH THE BABY BOND TRUST FUND AND TO APPROPRIATE 2
14	15		MONEY FOR PURPOSES CONSISTENT WITH THAT FUND. 3
15	16		The General Assembly of North Carolina enacts: 4
16	17		SECTION 1. Chapter 147 of the General Statutes is amended by adding a new 5
17	18		Article to read: 6
18	19		"Article 6H. 7
19	20		"Baby Bond Program Trust Fund. 8
20	21		"§ 147-86.90. Policy and definitions. 9
21	22		(a) Policy. – The General Assembly of North Carolina hereby finds and declares that 10
22	23		making a financial investment in the children of this State who come from limited economic 11
23	24		means and encouraging those children and their families to invest in their future financial success 12
24	25		is fully consistent with and furthers the long-established policy of the State to provide tools that 13
25	26		strengthen opportunities for personal economic development and long-term financial planning. 14
26	27		(b) Definitions. – The following definitions apply in this Article: 15
27	28		(1) Account holder. – An eligible individual who is the owner of an individual 16
28	29		account. 17
29	30		(2) Board. – The Baby Bond Program Trust Fund Board of Trustees established 18
30	31		in G.S. 147-86.92. 19
31	32		(3) Code. – The Internal Revenue Code, as defined in G.S. 105-228.90. 20
32	33		(4) Department. – The Department of State Treasurer. 21
33	34		(5) Eligible individual. – An infant born on or after January 1, 2024, who meets 22
34	35		all of the following: 23
35	36		a. Is born to a parent who (i) is a resident of this State, as defined in 24
36	37		G.S. 105-153.3, or (ii) establishes residence in this State within six 25
37	38		months of the infant's birth. 26
38	39		b. Resides in a household having an annual household income that does 27
39	40		not exceed two hundred percent (200%) of the federal poverty level. 28
40	41		(6) Federal poverty level. – A measure of income promulgated annually by the 29
41	42		United States Department of Health and Human Services. 30
42	43		(7) Fund. – The Baby Bond Program Trust Fund established in G.S. 147-86.91. 31
43	44		(8) Household income. – Income as defined in 7 C.F.R. §§ 245.2 and 245.6 or 32
44	45		any superseding federal law. 33
45	46		(9) Individual account. – An account established within the Baby Bond Program 34
46		-	Trust Fund for an eligible individual pursuant to G.S. 147-86.91. 35 General Assembly Of North Carolina Session 2025
47		-	Page 2 Senate Bill 279-First Edition
	47	+	Trust Fund for an eligible individual pursuant to G.S. 147-86.91. 35
	48	+	FILED SENATE
	49	+	Mar 12, 2025
	50	+	S.B. 279
	51	+	PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	52	+	Page 2 DRS15102-NIa-50
48	53		(10) Office of Vital Records. – The Office of Vital Records of the Division of 1
49	54		Public Health of the North Carolina Department of Health and Human 2
50	55		Services. 3
51	56		"§ 147-86.91. Baby Bond Program. 4
52	57		(a) Baby Bond Program Trust Fund. – There is created in the Department of State 5
53	58		Treasurer the Baby Bond Program Trust Fund to be administered by the Baby Bond Program 6
54	59		Trust Fund Board of Trustees established in G.S. 147-86.92. The Fund is created and shall be 7
55	60		administered (i) to establish and fund individual accounts in the amount of two thousand dollars 8
56	61		($2,000) for the financial benefit of eligible individuals and (ii) to enable contributors to save 9
57	62		funds and increase the likelihood of the account holder's future financial success. 10
58	63		(b) Accounts. – The following provisions apply to an individual account: 11
59	64		(1) The Board shall establish an individual account for each eligible individual 12
60	65		using the information provided to the Board by the Office of Vital Records 13
61	66		pursuant to subdivision (2) of this subsection. The Board shall notify the 14
62	67		Department of every individual account that is established. 15
63	68		(2) Every month, the Office of Vital Records shall transmit to the Board the name, 16
64	69		address, and social security number of all eligible individuals for whom the 17
65	70		Office of Vital Records received a birth or death certificate during that time. 18
66	71		(3) Within 30 days of notification by the Board pursuant to subdivision (1) of this 19
67	72		subsection, the Department shall transfer a one-time deposit of two thousand 20
68	73		dollars ($2,000) into the individual account of each new eligible individual. 21
69	74		(4) The Board shall assign a unique personal identifier for every individual 22
70	75		account that is established. 23
71	76		(5) Any person may make contributions to an individual account in a manner 24
72	77		approved by the Board. 25
73	78		(c) Contributions. – The Board is authorized to accept, hold, invest, and disburse 26
74	79		contributions, and interest earned on such contributions, from contributors as trustees of the 27
75	80		Fund. The Board shall hold all contributions to the Fund, and any earnings thereon, in the Fund 28
76	81		and shall invest the contributions in accordance with this section. The assets of the Fund shall at 29
77	82		all times be preserved, invested, and expended for the purpose of providing benefits to account 30
78	83		holders and paying reasonable expenses of administering the Fund and investing the assets of the 31
79	84		Fund. Nothing in this Article shall be construed to prohibit the Board from accepting, holding, 32
80	85		and investing contributions from contributors who reside outside of North Carolina. Neither the 33
81	86		contributions to the Fund, nor the earnings thereon, shall be considered State monies, assets of 34
82	87		the State, or State revenue for any purpose. An individual account, or a legal or beneficial interest 35
83	88		in an account, is not subject to attachment, levy, or execution by a creditor of the account holder. 36
84	89		(d) Distributions. – Distributions from individual accounts shall occur as follows: 37
85	90		(1) Except as provided in subdivision (2) of this subsection, money may not be 38
86	91		distributed from an individual account before an account holder is 18 years 39
87	92		old. 40
88	93		(2) An account holder may request a distribution from the account holder's 41
89	94		individual account before the account holder is 18 years old to pay for the 42
90	95		"qualified tuition expenses" of the account holder, as that term is defined in 43
91	96		section 25A of the Code. 44
92	97		(3) After an account holder is 18 years old or older, the Board may distribute 45
93	98		money from an individual account only if the account holder establishes that 46
94	99		the money is to be used for one or more of the following purposes: 47
95	100		a. The account holder's postsecondary education expenses. 48
96	101		b. The account holder's purchase of a primary residence. 49
97	102		c. The account holder's qualified business capitalization expenses, as 50
98	103		approved by the Board. 51 General Assembly Of North Carolina Session 2025
99		-	~~Senate Bill 279-First Edition~~ Page 3
	104	+	DRS15102-NIa-50 Page 3
100	105		d. The account holder's investment in financial assets or personal capital 1
101	106		that provides long-term gains to wages and wealth, as approved by the 2
102	107		Board. 3
103	108		(4) For an account holder to request a distribution from the account holder's 4
104	109		individual account, the account holder must be a resident of this State. 5
105	110		(5) If the account holder is 25 years old or older and has been a resident of another 6
106	111		state for five or more consecutive years, the money in the account holder's 7
107	112		individual account is presumed abandoned and is subject to the provisions of 8
108	113		Chapter 116B of the General Statutes. 9
109	114		(6) If an account holder dies with a balance in an individual account that is greater 10
110	115		than zero, the Board shall close the individual account and do one of the 11
111	116		following, as applicable, upon receipt of notice of the account holder's death: 12
112	117		a. Transfer the balance in the individual account to the individual account 13
113	118		of the account holder's surviving spouse. 14
114	119		b. Transfer the balance to the duly appointed legal representative of the 15
115	120		account holder's estate. 16
116	121		c. Transfer the balance to an individual otherwise entitled to the balance 17
117	122		under the laws of this State. 18
118	123		(e) Limitations. – The Board, in administering the Fund, shall ensure each of the 19
119	124		following: 20
120	125		(1) An eligible individual is limited to one individual account. 21
121	126		(2) An individual account or a legal or beneficial interest in an individual account 22
122	127		is not assignable, pledged, or otherwise used to secure or obtain a loan or other 23
123	128		advancement. 24
124	129		(3) Separate records and accounting are maintained for each individual account. 25
125	130		(4) Reports are made no less frequently than annually to each account holder. 26
126	131		(5) A trustee or guardian appointed as a signatory of an individual account does 27
127	132		not have or acquire any beneficial interest in the account and administers the 28
128	133		account for the benefit of the account holder. 29
129	134		(f) Notification to Parents. – The Board shall notify the parents of each eligible individual 30
130	135		for whom an individual account is established under subsection (b) of this section of the 31
131	136		following: 32
132	137		(1) The unique personal identifier associated with the account. 33
133	138		(2) Information about the individual account, including (i) instructions on how to 34
134	139		contribute to the account and (ii) the distribution requirements for accounts. 35
135	140		(3) Financial literacy information related to (i) budgets and savings accounts, (ii) 36
136	141		credit and interest, (iii) how to use financial services, and (iv) any other 37
137	142		financial literacy information that the Board deems appropriate. 38
138	143		(g) Notification to the Public. – The Board shall provide the public with information 39
139	144		about the Fund, including information on eligibility criteria, the contribution process, and the 40
140	145		distribution requirements for individual accounts. 41
141	146		"§ 147-86.92. Baby Bond Program Board of Trustees. 42
142	147		(a) Board Established. – There is established a Baby Bond Program Trust Fund Board of 43
143	148		Trustees to provide oversight of the general administration and proper operation of the Fund and 44
144	149		to determine the appropriate investment strategy for the Fund. The Board shall consist of the 45
145	150		following six members: 46
146	151		(1) The State Treasurer, ex officio, or the State Treasurer's designee, as chair. 47
147	152		(2) The Commissioner of Banks, ex officio, or the Commissioner of Banks' 48
148	153		designee. 49
149	154		(3) The Secretary of the North Carolina Department of Health and Human 50
150	155		Services, ex officio, or the Secretary's designee. 51 General Assembly Of North Carolina Session 2025
151		-	Page 4 ~~Senate Bill 279-First Edition~~
	156	+	Page 4 DRS15102-NIa-50
152	157		(4) A person appointed by the Governor having experience in investments and 1
153	158		finance. 2
154	159		(5) A person appointed by the General Assembly, upon recommendation of the 3
155	160		President Pro Tempore of the Senate, having experience in investments and 4
156	161		finance. 5
157	162		(6) A person appointed by the General Assembly, upon recommendation of the 6
158	163		Speaker of the House of Representatives, having experience in investments 7
159	164		and finance. 8
160	165		(b) Terms. – The members of the Board, except those members serving in an ex officio 9
161	166		capacity, shall be appointed for terms of three years and shall serve until their successors are 10
162	167		appointed and qualified. Vacancies are filled in the same manner as the original appointment. No 11
163	168		appointed member of the Board may serve longer than any of the following: 12
164	169		(1) Two consecutive three-year terms. 13
165	170		(2) Three consecutive terms of any length, in the event that one or more of the 14
166	171		terms is for less than three years in duration or the member serves a partial 15
167	172		term as a result of filling a vacancy. 16
168	173		(3) Eight consecutive years, regardless of term lengths. 17
169	174		(c) Duties. – The Board is authorized to: 18
170	175		(1) Delegate the authority to the State Treasurer to develop and perform all 19
171	176		functions necessary and desirable to (i) implement the investment strategy of 20
172	177		the Board, (ii) ensure the sustainability and growth of the Fund, and (iii) 21
173	178		provide other services as the Board shall deem necessary to facilitate 22
174	179		participation in the Fund. 23
175	180		(2) Notwithstanding the provisions of Article 3 of Chapter 143 of the General 24
176	181		Statutes, engage the services of consultants on a contract basis for rendering 25
177	182		professional and technical assistance and advice. 26
178	183		(3) Retain the services of auditors, attorneys, investment counseling firms, 27
179	184		custodians, or other persons or firms possessing specialized skills or 28
180	185		knowledge necessary for the proper administration of investment programs 29
181	186		that the Board administers pursuant to this Article. 30
182	187		(4) Develop marketing plans and promotional material. 31
183	188		(5) Establish the methods by which distributions from individual accounts shall 32
184	189		occur. 33
185	190		(6) Establish the method by which funds shall be allocated to pay for 34
186	191		administrative costs. 35
187	192		(7) Do all things necessary and proper to carry out the purposes of this act. 36
188	193		(d) Investments. – The Board shall determine and document in an investment policy 37
189	194		statement an appropriate investment strategy for the Fund containing one or more forms of 38
190	195		investment or strategies for investment from which account owners may select. The Board shall 39
191	196		authorize the State Treasurer to be responsible for engaging and discharging investment 40
192	197		managers and service providers, including contracting and contract monitoring, to implement the 41
193	198		investment strategy established by the Board. All amounts maintained in an individual account 42
194	199		shall be invested according to the account owner's election of one or more of the strategies 43
195	200		approved by the Board. Each strategy may include a combination of fixed income assets and 44
196	201		preferred or common stocks issued by any company incorporated, or otherwise located within or 45
197	202		outside the United States, or other appropriate investment instruments to achieve long-term return 46
198	203		through a combination of capital appreciation and current income. If the Board approves multiple 47
199	204		forms of investment as investment strategy options, transfers of an account owner's accumulated 48
200	205		funds shall be permitted among the various approved forms of investments, subject to reasonable 49
201	206		restrictions approved by the Board. 50 General Assembly Of North Carolina Session 2025
202		-	~~Senate Bill 279-First Edition~~ Page 5
	207	+	DRS15102-NIa-50 Page 5
203	208		(e) Discharge of Duties by the Board. – The assets of the Fund shall be held in trust for 1
204	209		the account holders. The assets of the Fund shall at all times be preserved, invested, and expended 2
205	210		for the exclusive purpose of providing benefits to account holders and paying reasonable 3
206	211		expenses of administering the Fund and investing the assets of the Fund. Compliance by the 4
207	212		Board with this section must be determined in light of the facts and circumstances existing at the 5
208	213		time of the Board's decision or action and not by hindsight. The Board shall discharge its duties 6
209	214		with respect to the Fund as follows: 7
210	215		(1) Solely in the interest of the account holders. 8
211	216		(2) With the care, skill, and caution under the circumstances then prevailing that 9
212	217		a prudent person acting in a like capacity and familiar with those matters 10
213	218		would use in the conduct of an activity of like character and purpose. 11
214	219		(3) Impartially, taking into account any differing interests of account holders. 12
215	220		(4) Incurring only costs that are appropriate and reasonable. 13
216	221		(5) In accordance with a good-faith interpretation of the law governing the Fund. 14
217	222		(f) Immunity. – A person serving on the Board shall be immune individually from civil 15
218	223		liability for monetary damages, and exempt to the extent covered by insurance, for any act or 16
219	224		failure to act arising out of that service except where any of the following apply: 17
220	225		(1) The person was not acting within the scope of that person's official duties. 18
221	226		(2) The person was not acting in good faith. 19
222	227		(3) The person committed gross negligence or willful or wanton misconduct that 20
223	228		resulted in the damages or injury. 21
224	229		(4) The person derived an improper personal financial benefit, either directly or 22
225	230		indirectly, from the transaction. 23
226	231		(g) Report. – The Board shall submit an annual evaluation of the Fund and prepare and 24
227	232		submit an annual report of such evaluation to the Joint Legislative Economic Development and 25
228	233		Global Engagement Oversight Committee. 26
229	234		"§ 147-86.93. Administration of Baby Bond Program. 27
230	235		(a) Administration. – The Board may delegate to the State Treasurer the authority to 28
231	236		develop and perform all functions necessary and desirable to (i) administer the Fund in such a 29
232	237		manner as to meet and comply with the requirements of this act, (ii) implement the investment 30
233	238		strategy established by the Board, and (iii) provide such other services as the State Treasurer 31
234	239		shall deem necessary to facilitate participation in the Fund. The State Treasurer is further 32
235	240		authorized to obtain the services of such investment managers, investment advisors, service 33
236	241		providers, or program managers as may be necessary for the proper administration, marketing, 34
237	242		and investment of the Fund. 35
238	243		(b) Disclaimer. – Nothing in this section shall be construed to create any obligation of the 36
239	244		State Treasurer, the State, or any agency or instrumentality of the State to guarantee for the 37
240	245		benefit of any parent, other interested party, or designated beneficiary the rate of return or other 38
241	246		return for any contribution to the Fund and the payment of interest or other return on any 39
242	247		contribution to the Fund. 40
243	248		(c) Fees and Costs. – The State Treasurer may establish application, account, and 41
244	249		administration fees in an amount not to exceed the amount necessary to offset the costs of the 42
245	250		program. The following costs may be paid directly from the Fund: 43
246	251		(1) The costs of administration, management, investment, and operation of the 44
247	252		Fund. 45
248	253		(2) The costs of all actions authorized by the Board. 46
249	254		(3) The costs of all actions delegated to the State Treasurer and the State 47
250	255		Treasurer's staff by the Board under this section. Such costs shall be allocated 48
251	256		among the account holders in such manner as may be prescribed by the Board. 49
252	257		The Board shall no less than annually approve a budget and allocation of costs. 50 General Assembly Of North Carolina Session 2025
253		-	Page 6 ~~Senate Bill 279-First Edition~~
	258	+	Page 6 DRS15102-NIa-50
254	259		(d) Means-Tested Program. – Notwithstanding any other provision of law, an individual 1
255	260		account shall not be considered a resource for purposes of means-tested State benefits. 2
256	261		Distributions from the Fund shall not be considered income for any State benefits eligibility 3
257	262		program that limits eligibility based on income. 4
258	263		(e) Account Information. – The information related to individual accounts are not public 5
259	264		records as defined in Chapter 132 of the General Statutes." 6
260	265		SECTION 2. The Department of Health and Human Services shall provide 7
261	266		information and assistance to the Department of State Treasurer and shall enter into a 8
262	267		data-sharing agreement with the Department of State Treasurer for the purpose of the ongoing 9
263	268		implementation of this act. The Department of State Treasurer shall consult with other 10
264	269		departments as needed. 11
265	270		SECTION 3. The Department of State Treasurer and the Department of Health and 12
266	271		Human Services are authorized to adopt rules necessary to implement this act. 13
267	272		SECTION 4. The State Treasurer shall begin transferring one-time deposits and 14
268	273		accepting contributions in accordance with G.S. 147-86.91 no later than February 15, 2026. 15
269	274		SECTION 5. The Board authorized in G.S. 147-86.92 shall be organized 16
270	275		immediately after a majority of the members have been qualified or appointed and have taken 17
271	276		the oath of office. The terms for the trustees that are appointed shall be for initial terms to expire 18
272	277		June 30, 2028. 19
273	278		SECTION 6. There is appropriated from the General Fund to the Department of 20
274	279		State Treasurer the sum of ten million dollars ($10,000,000) in nonrecurring funds for the 21
275	280		2025-2026 fiscal year for purposes consistent with this act. 22
276	281		SECTION 7. This act becomes effective July 1, 2025. 23